Free Republic
Browse · Search
Topics · Post Article

Skip to comments.

EU: [Italian PM] Mario Monti's exit is only way to save Italy
The Telegraph ^ | 12/10/2012 | Ambrose Evans-Pritchard

Posted on 12/10/2012 5:40:20 PM PST by bruinbirdman

Italy has only one serious economic problem. It is in the wrong currency.

The nation is richer than Germany in per capita terms, with some €9 trillion of private wealth. It has the biggest primary budget surplus in the G7 bloc. Its combined public and private debt is 265pc of GDP, lower than in France, Holland, the UK, the US or Japan.

It scores top of the International Monetary Fund’s index for “long-term debt sustainability” among key industrial nations, precisely because it reformed the pension structure long ago under Silvio Berlusconi.

“They have a vibrant export sector, and a primary surplus. If there is any country in EMU that would benefit from leaving the euro and restoring competitiveness, it is obviously Italy,” said Andrew Roberts from RBS.

“The numbers are staring them in the face. We think the story of 2013 is not about countries being forced to leave EMU but whether they choose to leave.”

A “game theory” study by BofA concluded that Italy would gain more than other EMU members from breaking free and restoring sovereign control over its policy levers.

Its International Investment Position is near balance, in stark contrast to Spain and Portugal (both in deficit by more than 90pc of GDP). Its primary surplus implies it can leave EMU at any moment it wishes without facing a funding crisis.

A high savings rate means that any interest rate shock after returning to the lira would mostly flow back into the economy through higher payments to Italian bondholders – and it is often forgotten that Italy’s “real” rates were much lower under the Banca d’Italia.

Rome holds a clutch of trump cards. The one great obstacle is premier Mario Monti, installed at the head of technocrat team in the November Putsch of 2011

(Excerpt) Read more at ...

TOPICS: Business/Economy; Crime/Corruption; Government; News/Current Events

1 posted on 12/10/2012 5:40:23 PM PST by bruinbirdman
[ Post Reply | Private Reply | View Replies]

To: bruinbirdman; All

So...Italy is doing oh so well...and still stays in the EU?

Things really aren’t that great in Italy if it must cling on to the EU.

And more proof Free Trade Globalism does not work

2 posted on 12/10/2012 6:17:10 PM PST by SeminoleCounty (Seems that the ones who understand little about the economy are economists)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SeminoleCounty
You ended your post with a non sequitur.
3 posted on 12/10/2012 11:04:28 PM PST by USFRIENDINVICTORIA
[ Post Reply | Private Reply | To 2 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794 is powered by software copyright 2000-2008 John Robinson